Memorable, sustainable retail experiences blend creativity and hard data. As important as the creative elements of your in-store experiences are, you must have clear metrics to determine which experiences are working, which need minor tweaks, and which are not worth the investment.
Our State of Consumer Behavior 2021 report revealed that customers today will quickly abandon one retail experience for another superior offering. Shoppers have specific expectations of retailers, including great customer service, efficient shopping experiences, convenience, and competitive pricing. Failing to monitor your organization’s success (and weaknesses) in every area of the shopper experience could harm your brand.
By implementing systematic, scalable metrics, you can accurately measure the ROI of each of your in-store experiences.
A RETAIL FRAMEWORK NEEDS CLEAR OBJECTIVES AND METRICS
When measuring success in any field, your evaluative framework must have two key elements: objectives and metrics. These elements are also necessary for measuring the ROI of your in-store retail experiences. Generally speaking, retail-specific objectives involve influencing shoppers in one or more ways.
In working with more than 2,500 retail organizations, we’ve seen the value in influencing consumer behavior. Organizations with sway over their shoppers may, as the net effect of incremental influence, foster long-term loyalty and bolster their revenues. Retailers often influence customers through specific, targeted, in-store experiences.
Here’s a fictitious example that demonstrates what this framework might look like:
Jane’s Bridal Shoppe will offer promotional photoshoots in its physical locations because it believes the photoshoots will help prospective customers discover and purchase products. Jane’s Bridal Shoppe believes incentivizing customers to try on its dresses will lead to direct sales and greater brand awareness through social media. To measure success, Jane’s Bridal Shoppe will track how many photoshoot participants spend money at its stores.
This example involves a specific promotional event for a specific type of retailer. The advantage of this framework, though, is that it translates to the many different facets of the retail experience. Whether you want to measure the effectiveness of self-checkout terminals, an in-store marketing campaign, or another type of retail experience, you can rely on this versatile framework.
There are a few objectives that retailers of all sizes and stripes share. When setting those objectives, retail organizations can use the following metrics to gauge their success.
KEY OBJECTIVES FOR RETAIL SUCCESS (AND CORRESPONDING METRICS)
When Wal-Mart offers shoppers the opportunity to donate to select charities at the point of sale, it does so with specific objectives in mind. Sure, there is certainly an element of pure-intentioned philanthropy at play. But in the process of highlighting its affiliations with various charities, Walmart is also promoting its brand values.
When a store’s leadership measures shoppers’ donations at the point of sale, it may determine the extent to which its charitable partnerships resonate with customers. High donation rates may indicate shared values between retailer and customer. This unity of cause may translate to loyalty among customers who appreciate the store’s charitable drives.
On the other hand, when a store reduces the price of a certain good, it does so with a totally separate objective in mind: to sell more of that specific product. Sales figures for that specific item at sale pricing will determine whether customers are motivated to buy due to price savings.
As you can see, a single store may contain hundreds or even thousands of individual retail experiences. Each retail experience may have its own objective and metrics of success. Clarifying these objectives and metrics to the greatest possible degree is the retailer’s prerogative.
Let’s look at some of the foremost objectives that retail organizations must consider, and how those organizations can measure their progress toward those objectives.
OBJECTIVE 1: INCREASE IN-STORE REVENUE
• Customer spend per location visit.
• Customer conversion (percent that purchases after entering).
• Cost per acquisition (new customers acquired through physical locations).
OBJECTIVE 2: PROMOTE SPECIFIC PRODUCTS AND SERVICES
• Total number of sales/revenue generated from a specific offer (like sale pricing), product, or service.
• Number of customers that purchase a specific product or service.
OBJECTIVE 3: DELIVER A MORE EFFICIENT CUSTOMER JOURNEY
• Average time from customer entry to exit.
• Number of customers using self-checkout solutions.
• Total checkout times.
• Time spent searching for products.
OBJECTIVE 4: REDUCE STAFFING COSTS
• In-store revenue divided by the number of workers onsite.
• Number of in-location staff interactions per customer dollar spent.
• Cost of virtual shopping assistant solutions versus human employees.
• Cost of self-checkout kiosks, digital signage, and other tech solutions versus human employees.
OBJECTIVE 5: UNIFY ONLINE AND OFFLINE MARKETING EFFORTS
• Sales generated from buy online, pick up in-store (BOPIS) offerings.
• In-store sales generated from online marketing campaigns.
OBJECTIVE 6: PROMOTE BRAND VALUES AND CORE MESSAGING
• Customer donations to sponsored charities.
• Engagement with social media campaigns related specifically to brand values and core messaging.
• Customer Net Promoter Score (NPS).
Some metrics are easier to obtain and interpret than others. Sales data is generally straightforward and immediately accessible. Metrics such as checkout times and time spent searching for products, on the other hand, may require more creativity to obtain. Customer surveys are usually an option. The more data you have about the customer experience, the more acutely you can evaluate your in-store experiences.
Per our State of Consumer Behavior 2021 report, 61% of shoppers will spend more per visit if their in-store experiences leave a positive impression. Ninety percent of those shoppers will return to your stores in the future for more of those positive experiences.
This data tells us how important in-store experiences are generally, but it does not tell us how to measure the relative impact of each specific in-store experience.
Using the framework and corresponding metrics outlined above, your organization may be better able to measure the efficacy of each experience within your stores. The more negative and mediocre experiences you can excise and replace with alternatives that your shoppers genuinely love, the more revenue you can expect.
CEO of Raydiant, a digital signage and in-store experience solutions provider.